Section 22 of the Act of August 27, 1894, c. 349, 28 Stat. 509,
provides:
"That where imported materials on which duties have been paid
are used in the manufacture of articles manufactured or produced in
the United States, there shall be allowed on the exportation of
such articles a drawback equal in amount to the duties paid on the
materials used, less one percentum of such duties,"
to be paid under such regulations as the Secretary of the
Treasury shall prescribe. Where linseed was imported subject to a
specific duty of 20 cents per bushel of 56 pounds, and made into
linseed oil and oilcake, a byproduct weighing more but worth less
than the oil,
held that the drawback on the oil-cake,
which alone was exported, should be computed on the basis of the
respective values of the two products, and not according to their
respective weights. P.
252 U. S.
143.
Much weight is given to a contemporaneous and long continued
construction of an indefinite or ambiguous statute by the executive
department charged with its administration. P.
252 U. S.
145.
The repeated reenactment of a statute without substantial change
may amount to an implied legislative approval of a construction
placed upon it by executive officers. P.
252 U. S.
146.
53 Ct.Clms. 635 affirmed.
The case is stated in the opinion.
Page 252 U. S. 143
MR. JUSTICE CLARKE delivered the opinion of the Court.
This is a suit to recover the difference between the amount of
drawback allowed by the government to the appellant, a corporation,
as an exporter of linseed oil cake, and the amount to which it
claims to be entitled under ยง 22 of the Act of Congress effective
August 27, 1894, c. 349, 28 Stat. 509, 551, which reads as
follows:
"That where imported materials on which duties have been paid
are used in the manufacture of articles manufactured or produced in
the United States, there shall be allowed on the exportation of
such articles a drawback equal in amount to the duties paid on the
materials used, less one percentum of such duties. . . ."
It is further provided in the section that the drawback due
thereon shall be paid to the manufacturer, producer, or exporter
"under such regulations as the Secretary of the Treasury shall
prescribe."
The appellant imported large quantities of linseed upon which it
paid a specific duty of twenty cents per bushel of fifty-six
pounds. This seed, when treated by a simple process, yielded about
twenty pounds of linseed oil and about thirty-six pounds of linseed
oil cake to the bushel. The oil was much more valuable than the oil
cake, the latter being composed of the solid substance of the seed
and a small amount of oil not recovered, which made it valuable as
a feed for stock. It is a byproduct, and, except for the small
amount of oil in it, would be mere waste.
Appellant exported large quantities of oil cake, derived from
seed which it had imported, and made demand in proper form for the
drawback provided for by the act of Congress.
The law providing for such drawbacks has differed in form of
expression from time to time, but, since the Act of August 5, 1861,
c. 45, 12 Stat. 292, it has not differed in
Page 252 U. S. 144
substance from the Act of 1894 as we have quoted it. The number
of articles to which the law is applicable is very great, among
them, notably, "refined sugar and syrup which come from imported
raw sugar and refined sugar and syrup which come from imported
molasses."
The Court of Claims found that:
"From August 5, 1861, to the present time the practice of the
Treasury Department where several articles are manufactured from
the same imported material has been to calculate and to pay the
drawback by distributing the duty paid on the imported material
between such articles in proportion to the value, and not in
proportion to their weight, as well where the imported material
paid a specific as well as where it paid an
ad valorem
duty. Such calculation and payment had been made under Treasury
Department regulations."
The claim of the appellant is that the correct construction of
the section relied upon requires that the drawback should be
computed on the basis of the weights of the oil and oil cake
derived by the process of manufacture from the seed, instead of on
the basis of the values of the two products, as it was computed by
the government, and the question for decision is whether the
department regulation is a valid interpretation of the statute.
The act quoted provides that, where imported materials are used
in this country in the manufacture of articles which are exported,
a drawback shall be allowed "equal in amount to the duties paid on
the material used," less one percentum. What was the amount of duty
paid on the small amount of oil and on the large amount of solid
substance, the hull and the fiber, which made up the exported oil
cake? Was it substantially two-thirds of the total, determined by
weight -- on thirty-six of fifty-six pounds -- or was it about
one-fourth of the total, as determined by the relative values of
the oil and of the oil cake derived from the seed?
Page 252 U. S. 145
The terms of the provision show that the contingency of having
one kind of dutiable material, from which two or more kinds of
manufactured products might be derived, is not specifically
provided for. Obviously only a part, the least valuable part, of
the materials or ingredients of the linseed were used in the making
of oil cake, and therefor the problem of determining the "drawback
equal in amount to the duty paid" on the part so used -- the solid
parts of the seed and the small amount of oil in the oil cake --
was not a simple or an easy one.
The statute, thus indefinite, if not ambiguous, called for
construction by the department, and the regulation adapted to cases
such as we have here commends itself strongly to our judgment.
It does not seem possible that Congress could have intended that
two-thirds of the duty should be returned when one-quarter in value
of the manufactured product should be exported, or that the
exporter should retain twenty pounds of oil, estimated in the
findings as worth about seven and one-half cents a pound, derived
from each bushel of seed, and recover two-thirds of the duty paid
when he exported thirty-six pounds of seed cake, worth slightly
more than one cent a pound, derived from the same bushel of seed.
Such results -- they must follow the acceptance of the appellant's
contention -- should be allowed only under compulsion of imperative
language such as is not to be found in the section we are
considering.
We prefer the reasonable interpretation of the department, which
results in a refund of one-quarter of the duty when one-quarter of
the value of the product is exported.
From
Edwards v.
Darby, 12 Wheat. 206, to
Jacobs v.
Prichard,, 223 U. S. 200, it
has been the settled law that, when uncertainty or ambiguity such
as we have here is found in a statute, great weight will be given
to the contemporaneous construction by department officials who
were called upon to act under the law and to carry its
provisions
Page 252 U. S. 146
into effect, especially where such construction has been long
continued, as it was in this case for almost forty years before the
petition was filed.
United States v. Hill, 120 U.
S. 169.
To this we must add that the department's interpretation of the
statute has had such implied approval by Congress that it should
not be disturbed, particularly as applied to linseed and its
products.
The drawback provision, under which the construction complained
of originated, continued unchanged from 1861 until the revision of
the statute in 1870, and the Court of Claims finds that the rule
for determining the drawback on oil cake was applied during the
whole of that period of almost ten years. The Tariff Act approved
July 14, 1870, c. 255, 16 Stat. 256, 265, expressly provided, in
the flaxseed or linseed paragraph, "that no drawback shall be
allowed on oil cake made from imported seed," and this provision
was continued in the Tariff Act of March 3, 1883, c. 121, 22 Stat.
488, 513, and in the Act of October 1, 1890, c. 1244, 26 Stat. 567,
586. But in the Act of 1894, 28 Stat. 509, 523, the prohibition was
eliminated, thus restoring the law on this subject as applied to
this material to what it was in substance from 1861 to 1870.
United States v. Philbrick, 120 U. S.
52,
120 U. S. 59.
During all the intervening twenty-four years, this rule of the
department with respect to drawbacks had been widely applied to
many articles of much greater importance than linseed or its
derivatives, and the practice was continued, linseed included after
1894, until the petition in this case was filed. The reenacting of
the drawback provision four times, without substantial change,
while this method of determining what should be paid under it was
being constantly employed, amounts to an implied legislative
recognition and approval of the executive construction of the
statute (
United States v. Philbrick, supra; United States v. G.
Falk & Brother, 204 U. S. 143,
204 U. S. 152;
United States v.
Cerecedo
Page 252 U. S. 147
Hermanos y Compania, 209 U. S. 337),
for Congress is presumed to have legislated with knowledge of such
an established usage of an executive department of the government.
United States v.
Bailey, 9 Pet. 238,
34 U. S.
256.
This case would not deserve even the limited discussion which we
thus have given it were it not for the extensive and long continued
application of the regulation of the department to imported and
exported materials other than such as are here involved. This
specific case is sufficiently ruled by the clear and satisfactory
decision of the Circuit Court of Appeals for the Second Circuit,
rendered twenty-two years ago, in
United States v. Dean Linseed
Oil Co., 87 F. 453, in which the Court of Claims found
authority for dismissing the plaintiff's petition. The judgment of
the Court of Claims is
Affirmed.